Rent to Own Housing, A Building Block of Communities
Rent to own housing is a great way for people to work towards homeownership, but it can also help improve the entire community. In today’s blog post I want to discuss all of the benefits that rent to own can bring to a community as well as some examples of it in action.
Rent to own takes place most of the time in one of three scenarios.The first is that a vacant, foreclosed, or dilapidated home is bought by an investor who fixes up and sells the home via rent to own to quickly turn the property. The next scenario is where a developer builds a series of homes or condos for luxury or in impoverished areas using rent to own to entice buyers. The final scenario is when a single home owner has trouble selling their home and decides to use this method to sell.
When we look at the first scenario you might think, so what an investor made a buck off of flipping a house how does that benefit anyone but the investor and the buyer? Well, when a neighborhood has a home that is run down, vacant or foreclosed it can lower home prices nearby as well as attract crime, squatting and drug use. The incentive of that the quick turn around rent to own provides for the investor can improve home prices for everyone in the area as well as prevent many problems.
Although a developer building rent to own luxury homes or condos can some what drive up the surrounding home prices it doesn’t have quite the overall community building affect that takes place when they build a development in an impoverished area. We saw a great example of this situation in Nebraska where developer John Foley is attempting to help house the working poor in Omaha by renovating 52 homes that he plans to sell using rent to own. While he still has some hurdles to overcome if he successfully gets the tax credits needed to finance it he could significantly improve this community in addition to providing affordable housing to families in need.
It’s always a frustrating story when a seller can’t find the right offer for their home and desperately wants or needs to move. Many times in this situation home either remains vacant or is run through a series of tenants. While we visited the issues with a vacant home above a home with bad tenants can be just as bad. Tenants tend to not take as good of care of the home and if evicted even due damage to the property purposefully. In a rent to own situation the person renting intends to buy the house and is more likely to make friends with neighbors and take good care of the home.
Regardless of the scenario rent to own can provide serious benefits to the community and in some cases helping it actually flourish.